Exemptions and rollovers

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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There are exemptions and rollovers that may allow you to reduce, defer or disregard your capital gain or capital loss.

If you are required to complete a CGT schedule, you may be required to provide information regarding the capital gains disregarded: see part B of this guide for individuals or part C for companies, trusts and funds.

There is no rollover or exemption for a capital gain you make when you sell an asset and put the proceeds into a superannuation fund, use the proceeds to purchase an identical or similar asset, or transfer an asset into a superannuation fund. For example, if you sell a rental property and put the proceeds into a superannuation fund, or use the proceeds to purchase another rental property, a rollover is not available. However, an asset, or the capital proceeds from the sale of an asset, may be transferred into a superannuation fund in order to satisfy certain conditions under the small business retirement exemption. For more information about the CGT concessions for small business, see the Guide to capital gains tax concessions for small business 2014.

Exemptions

Generally, capital gains and capital losses from pre-CGT assets (that is, an asset you acquired before 20 September 1985) are exempt. However, CGT event K6 can result in capital gains if certain CGT events happen to pre-CGT shares in a company or to pre-CGT interests in a trust. See Taxation Ruling TR 2004/18– Capital gains: application of CGT event K6 (about pre-CGT shares and pre-CGT trust interests) in section 104-230 of the Income Tax Assessment Act 1997.

Another important exemption is for a capital gain or capital loss you make from a CGT event relating to a dwelling that was your main residence. This rule can change, however, depending on how you came to own the dwelling and what you have done with it, for example, if you rented it out. For more information see Real estate and main residence.

Capital gains and capital losses that are also disregarded include those you make from:

a car (that is, a motor vehicle designed to carry a load of less than one tonne and fewer than nine passengers) or motorcycle or similar vehicle

a decoration awarded for valour or brave conduct, unless you paid money or gave any other property for it

collectables acquired for $500 or less

a capital gain from a personal use asset acquired for $10,000 or less

any capital loss from a personal use asset

CGT assets used solely to produce exempt income or some amounts of non-assessable non-exempt income (that is, tax-free income)

transferring an asset into a Special Disability Trust for no consideration

a reimbursement or payment of your expenses (but not for the loss, destruction or transfer of an asset) under a scheme established

by an Australian government agency, a local government body or foreign government agency

under an Act or legislative instrument (for example, regulations or local government by-laws)

a reimbursement or payment of expenses under the Unlawful Termination Assistance Scheme or the Alternative Dispute Resolution Assistance Scheme

a reimbursement or payment of your expenses under the General Practice Rural Incentives Program or the Sydney Aircraft Noise Insulation Project

a reimbursement or payment made under the M4/M5 Cashback Scheme

a re-establishment grant made under section 52A of the Farm Household Support Act 1992

a sugar industry exit grant paid under the Sugar Industry Reform program

tobacco industry exit grant paid under the Tobacco Growers Adjustment Assistance Programme 2006 if you undertook to not become the owner or operator of an agricultural enterprise within five years after receiving the grant

a right or entitlement to a tax offset, deduction or a similar benefit under an Australian law, under the law of a foreign country or part of a foreign country

payments made under the German Forced Labour Compensation Programme (GFLCP), and certain payments or property received by Australian residents as a result of persecution during the Second World War

some types of testamentary gifts

assignment of a right under, or for, a general insurance policy held with an HIH company, to the Commonwealth, the trustee of the HIH trust or a prescribed entity

your rights being created or your rights ending for making a superannuation agreement (as defined in the Family Law Act 1975), the termination or setting aside of such an agreement or such an agreement otherwise coming to an end

the ending of rights that directly relate to the breakdown of your marriage or relationship, including cash you receive as part of your marriage or relationship breakdown settlement

a CGT event happening for a segregated current pension asset (made by a complying superannuation entity)

in certain circumstances, a general insurance policy, a life insurance policy or an annuity instrument

You may reduce your capital gain if, because of a CGT event, you have included an amount in your assessable income other than as a capital gain. For example, if you make a profit on the sale of land that is included in your assessable income as ordinary income, you don’t also include that profit as a capital gain.

from the expiry, forfeiture, surrender or assignment of a lease if the lease is not used solely or mainly for the purpose of producing assessable income

from a payment to any entity of personal services income that is included in an individual’s assessable income under the alienation of personal services income provisions, or any other amount attributable to that income

as an exempt entity.

Rollovers

You may defer or disregard (that is, rollover) a capital gain or capital loss until a later CGT event happens. The types of rollovers available are listed below. Only the first four types are covered in detail in this guide. If you would like information on the others, contact us.

Marriage or relationship breakdown

In certain cases where an asset or a share of an asset is transferred from one spouse to another after their marriage or relationship breaks down, any CGT is automatically deferred until a later CGT event happens (for example, until the former spouse sells the asset to someone else). For more examples of how CGT obligations are affected by marriage or relationship breakdown, see Marriage or relationship breakdown.

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We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.